TDK has embraced the opportunities that AI transformation presents

TDK is driving the future of electrification, renewable energy, and smart technologies with its industry-leading portfolio of passive components, sensors, power solutions, and energy storage innovations. In this conversation, Michael Chinn, Chief Sales Officer of TDK’s Sensor Systems Business Company, shares insights into the company’s strategies, partnerships, and sustainability vision.

TDK has made significant advancements in the fields of electrification and energy storage. Can you elaborate on how TDK’s technologies are enabling next-generation electric vehicles (EVs)?

TDK is uniquely positioned with a world-leading portfolio of passive components, sensors, power solutions, and other technologies for EVs.  Our electronic components and devices range from automotive-grade capacitors, inductors, filters, and protection devices to advanced sensors that include TMR, Hall, and MEMS technology, as well as software.  As vehicles become increasingly electrified internally, the penetration of motors within the car continues to increase, and we have developed a leading portfolio of motor controllers to drive these devices.  We also offer EV-specific DC-DC converters, onboard chargers, and neodymium and ferrite magnets for motors.  Togethe,r these technologies and products contribute to improved safety, energy efficiency, and comfort in automobiles, supporting our diverse global client base through “value creation via manufacturing”.

In addition to TDK’s broad lineup of standard components, our custom solutions for power conversion, power and battery management, e-motor control, thermal management, and other applications draw from our broad technology and application know-how.  We are proud to be a core supplier of these custom solutions to the world’s leading EV OEMs and Tier 1s, present in all major markets, with our dedicated automotive sales, applications, and solutions teams working closely with our customers and ecosystem partners to support them in bringing their leading-edge products to the market.

What role do TDK’s passive components and sensors play in advancing renewable energy systems, particularly in solar and wind energy applications?

Renewable energy systems are at the heart of satisfying global requirements for sustainable, carbon-neutral energy sources and TDK is proud to participate fully in providing components and solutions for these important enablers of climate change reduction.  Photovoltaic (solar) energy systems rely heavily on high-performance power conversion, where our passive components, including custom designs, play a key role.  Magnetic filtering solutions for high-power DC and AC voltage lines, as well as capacitive devices for DC-links and protection components for both high- and low-voltage are essential to enable high-efficiency, reliable designs with long service lives.  TDK supplies standard and custom devices for these applications in all major markets and is often able to provide in-market manufacturing.

In the wind-energy segment, similar solutions are used, but generally with much higher power ratings and the requirement for high reliability and durability with high quality as given.  In addition to high-power passive components, permanent magnets are a key element of high-efficiency wind power generators, and TDK is engaged in the supply of high-performance magnets for both conventional and offshore wind farms.  Furthermore, the need to continuously monitor the behavior of the complex, high-value equipment in wind turbines to enable predictive maintenance requires highly sensitive sensors, which are also part of TDK’s portfolio.

With the growing demand for high-efficiency batteries, how is TDK innovating in solid-state battery technology and energy storage solutions?

TDK has been working on solid-state battery technology for many years and has already brought several products for small capacity rechargeable batteries to the market, including our CeraCharge™ product range.  In 2024, we announced a breakthrough with a 100x increase in solid-state battery energy density based on new materials, which we plan to deploy to the market in due course.

TDK is also the world-leader in rechargeable Lithium batteries for portable devices through our subsidiary Amperex Technologies, acting as the primary battery supplier to the leading global consumer device makers.  Finally, we participate with our joint venture partner CATL in energy storage solutions for a wide range of markets under the Ampace brand, which has gone from strength to strength since its establishment in 2022.

How is TDK aligning its R&D investments with global sustainability goals, especially in decarbonization and electrification?

TDK’s corporate motto is “Contribute to culture and industry through creativity”, which embodies our holistic approach to addressing the UN’s Sustainable Development Goals (SDGs).  Within our product development activities, we have many examples where we work on products and solutions which contribute to specific SDGs, such as Affordable and Clean Energy (for example, products to enable the supply of safe and secure green energy) or Sustainable Cities and Communities (for example, components to be used in e-mobility and automatic driving systems).

TDK also makes our efforts within our own operations to address SDGs, such as Responsible Consumption and Production, an example of which is our recent introduction of Radio Wave Absorbers for anechoic test chambers manufactured from biomass material.  We also make extensive use of in-house and external renewable energy sources for our own operations, reaching 55.2% use in 2024 and with a committed target of achieving 100% by 2050.

TDK has received several sustainability awards and recognitions, including a Gold Medal from EcoVadis, an A ranking in the CDP Supplier Engagement Rating, and inclusion in the FTSE4Good Index Series. We were also recognized as a leader in CDP’s climate change category and were included in the CDP’s “A List” for water security for the fifth consecutive year. Furthermore, TDK received a Sustainability Excellence Award from Daiwa Investor Relations.

TDK has a strong presence in the IoT space. Could you share examples of how your sensor and connectivity solutions are driving real-world impact in smart homes or smart cities?

As a broad-line sensor solution provider, TDK is able to offer many of the key elements for smart home applications.  Our suite of sensing solutions enables next-generation smart speakers, remote controls, appliances, environmental control, lighting, robotic vacuum cleaners, security cameras, alarms, door locks, and more.  We offer custom smart home solutions based on MEMS SmartMotion™ Inertial Motion Units (IMUs) with sensor fusion algorithms, while our standard lineup includes SmartSonic™ MEMS microphones and ultrasonic time-of-flight sensors, including the newly available SmartSonic™ sensor, which is ideal for presence detection.

We are very proud to have worked with WeWalk on their Smart Cane 2 product, which enhances accessibility for people with visual impairments without compromising on ergonomics.  This ground-breaking product includes a MEMS microphone to enable an intelligent voice assistant for audible assistance, an ultrasonic sensor to safely detect nearby obstructions or objects without actual impact and a MEMS IMU to aid accurate navigation of the environment.

In addition, TDK’s edgeRX™ sensing solution combines our high-performance MEMS motion sensors with AI technology at the point of sensing to provide health monitoring for industrial equipment, including failure prediction capabilities.

The automotive industry is rapidly evolving. How is TDK adapting its product portfolio to meet the challenges of autonomous and connected vehicles?

The latest autonomous driving (AD) vehicle platforms are based on some of the most advanced processing and Machine Learning (ML) technologies.  The core computing and control units in these vehicles require high-performance components for sensing, power management, noise suppression, communication, and thermal management.  TDK has for many years been intimately involved in the AD and Advanced Driver Assistance Systems (ADAS) ecosystem, working with leading semiconductor makers, system providers, and OEMs to develop technologies and components to enable their solutions.

TDK offers high-performance MEMS Inertial Motion Units for seamless integration in AD control units and also provides an integrated software solution to fuse inertial sensing data with dead-reckoning to dramatically improve the accuracy of vehicle positioning in GPS blind spots.  Other Hall and TMR sensors from our lineup provide high-sensitivity position detection for the control of actuators in ADAS systems, while our MEMS Mirror technology may be deployed in the projection of images in head-up displays.  We also have a world-leading portfolio of the passive components necessary to enable the failure-free operation of AD and ADAS electronic control units, radar, lidar, and optical imaging systems, and ultrasonic parking assistance.  Finally, our radio frequency filters, signal conditioning filter,s and matching components are a key part of the Vehicle-to-Everything (V2X) communication systems, which are essential in modern connected mobility applications.

Can you shed light on any recent partnerships or strategic collaborations that are helping TDK accelerate innovation in EVs, renewable energy, or industrial IoT?

In 2022, TDK established two joint ventures between our subsidiary Amperex Technology Limited (ATL) and the world’s leading rechargeable battery supplier CATL.  These JVs specialize in the development, manufacture and sales of medium size rechargeable batteries for applications such as residential and commercial Energy Storage Systems (ESS), electric motorcycles, and other industrial applications by integrating the technologies and expertise of ATL and CATL.  Furthermore, the relationship provides a framework for collaboration between TDK and CATL for the development of components and power supplies for automotive applications, where CATL has a strong market position.

On the other hand, our TDK Ventures venture capital operation has invested $500M in start-ups working in strategic technologies and products contributing to Computing and Connectivity, Energy and Cleantech, AgTech and HealthTech, Mobility and Space, Industrial and Robotics and Next Generation Materials.  However, the TDK Venture’s approach goes beyond financial investments only, since we work to support our portfolio companies to engage closely with TDK, leveraging our technology capabilities and global reach to multiple the real impact of our investments and support their growth trajectories.

With the global supply chain undergoing transformation, how is TDK ensuring resilience and scalability in delivering its electronic components across industries?

Due to our history of organic and inorganic growth, TDK has a highly diversified geographical footprint in R&D, manufacturing, supply chains, and market penetration.  This is a great strength that we utilize to offer multiple manufacturing sites for many products, together with material supply redundancy and a combination of in-house and outsourced manufacturing.  For example, we have been able to offer customers alternative manufacturing locations for key products as they seek to diversify and derisk their inbound supply chains, shifting our production from one factory to another on the same continent or even to the other side of the globe.

TDK currently has over 100,000 employees working in over 250 sites for R&D, manufacturing, and sales in over 30 countries and regions.  For almost 90 years, we have adjusted our activities to adapt to changes in market dynamics and other external factors and we will continue this optimization to support our customers’ priorities and enable their success.

How does TDK plan to leverage AI, data analytics, or digital twins in its future product development or customer solutions?

AI Transformation is at the heart of the electronics industry, and TDK has embraced the opportunities that this presents, proudly offering components and solutions that play key roles in many aspects of the global AI ecosystem.  Examples range from high-performance passive components for power supplies in AI servers or power management in smartphones to our edgeRX™ sensing solutions with built-in Machine Learning (ML) capabilities, including our latest edgeRX Vision™ solution, which brings ML capability seamlessly to Automatic Optical Inspection (AOI) in product lines.

A particular focus for TDK is the field of Augmented Reality (AR), where we have a wide portfolio of products necessary to enable leading-edge designs of AR glasses, including lightweight batteries, image projection components, motion sensors and audio sensing, among others.  We recently acquired SoftEye, thereby adding the capability to supply custom semiconductors, cameras, software, and algorithms for use in eye-tracking in smart glasses.

Within TDK’s own operations, AI is extensively used in many areas.  In our manufacturing plants, we deploy AI technology to optimize machine maintenance cycles and improve the accuracy of AIO in our product lines.  In R&D, AI is used to accelerate the development of new materials, reducing risk and cycle times in experimentation with new formulations.  We also make increasing use of AI in our sales and business planning functions, helping us to accurately monitor thousands of customer engagements and identify those where additional resources may be needed to ensure a successful outcome for our customers and TDK.

Looking ahead, what are TDK’s top three strategic priorities for the next 3–5 years, particularly in emerging technology areas?

Digital Transformation (DX) through AI is naturally a top priority for TDK, and we will continue to invest in fundamental and applied technologies to enable this.  Our DX strategy is centered around leveraging digital technologies to accelerate the digitalization of society and enhance our own operations, sustainability, and corporate value. This involves integrating software technology with our core strengths in materials and process technologies, while also focusing on areas like sales and marketing automation, manufacturing efficiency, and sustainability.  An example of our technology development for AI is the spin-memristor, an element that plays a foundational role in neuromorphic computing devices, which we have developed by leveraging spintronics, a core technology of TDK.  We are working towards actualizing neuromorphic devices capable of reducing the power consumption of today’s AI systems to less than 1/100 of current levels.

Another priority for TDK is Energy Transformation (EX), which is a key part of our sustainability and business growth initiatives.  Through EX, we aim to address climate change and promote a sustainable society through efficient energy use, low-carbon energy sources, and other environmental solutions. TDK’s EX strategy is intertwined with our DX activities, both contributing to our long-term vision and business plan.   We have many examples of products and technologies developed to support EX, many of which have been mentioned in my earlier responses.

Finally, TDK’s Sustainability Transformation (SX) strategy, which has been recognized by the Japanese Ministry of Economy, Trade and Industry (METI) and the Tokyo Stock Exchange, focuses on leveraging the company’s core competencies to enhance our ability to generate growth capital sustainably and improve overall corporate value. This involves integrating environmental, social, and governance (ESG) factors into our business operations and decision-making processes.  Through multiple initiatives, TDK aims to greatly strengthen our “pre-financial capital”, such as human resources, fundamental technologies, and IP, which together provide a firm foundation on which to build our future growth, acting as a robust and adaptable organization.